Regulating AI for Business in Tanzania : A Comparative Analysis

by Sunday Ndamugoba (LLB(TZ)LLM(UK))

Key Highlights

Current Landscape: Tanzania is gradually adopting AI technologies across sectors, but lacks a cohesive regulatory framework.

Digital Transformation Agenda: The government is pushing for a digital economy through initiatives like the Tanzania Digital Economy Strategic Framework.

AI Governance Initiative: Launched in 2022, this initiative aims to create a robust ecosystem for ethical AI deployment.

Comparative Analysis: Learning from the EU’s AI Act and other African nations can guide Tanzania in developing its regulatory framework.

Challenges: Key challenges include a lack of awareness, limited resources, and the need for international cooperation.

Introduction

The rapid advancement of artificial intelligence (AI) presents both opportunities and challenges for businesses in Tanzania. As AI technologies become increasingly integrated into various sectors, the need for a robust regulatory framework is paramount. This article explores the current state of AI regulation in Tanzania, drawing insights from the European Union’s AI Act and other African nations’ policies. It also outlines the principles that should guide Tanzania’s approach to AI regulation and discusses relevant legal precedents that highlight the importance of responsible AI governance.

The Current State of AI in Tanzania

Tanzania is witnessing a gradual integration of AI technologies across multiple sectors, including agriculture, healthcare, and finance. For instance, AI-driven applications are enhancing agricultural productivity by providing farmers with data-driven insights. However, the absence of a cohesive regulatory framework raises concerns regarding ethical practices, data privacy, and the potential for misuse of AI technologies.

Under President Samia Suluhu Hassan, the government has initiated a digital transformation agenda aimed at modernizing the economy and improving service delivery through technology. The Tanzania Digital Economy Strategic Framework 2024-2034, launched in July 2024, outlines a comprehensive plan for the next decade, emphasizing the importance of public-private partnerships to drive innovation and economic growth.

Accoarding to a report by Sahara Sparks “Artifical Intelligence in Tanzania, Whats Happening”, there has been a lot of activities from the AI front in Tanzania for example Startups such as Agrobot using a chatbot to provide relevant information to farmers, Dr. Elsa an AI-powered medical assistant and e-Shangazi a chatbot that provides curated and youths friendly sexual reproductive health information shows the future of adoption of the technology in Tanzania looks promising being led by local innovators and experts.

AI Governance for Tanzania Initiative

In 2022, the AI Governance for Tanzania Initiative was established under the Digital Agenda for Tanzania Initiative. This initiative aims to foster a robust ecosystem for AI technology, focusing on ethical, transparent, and equitable deployment. It promotes collaboration among AI practitioners, policymakers, and researchers to address the unique challenges and opportunities presented by AI in Tanzania.

Learning from the European Union

The EU AI Act serves as a global benchmark for AI regulation, emphasizing transparency, accountability, and human rights. The Act categorizes AI systems based on their risk levels, allowing for tailored regulations that ensure safety and ethical considerations are prioritized. Tanzania can draw valuable lessons from the EU’s approach, particularly in establishing a risk-based regulatory framework that addresses the potential risks associated with AI technologies.

The UK’s approach to Artificial Intelligence (AI) development is guided by the National AI Strategy (2021) and supported by institutions like the Centre for Data Ethics and Innovation (CDEI). These frameworks emphasize the importance of responsible and ethical AI deployment. Meanwhile, the Information Commissioner’s Office (ICO), the body responsible for enforcing data protection, provides valuable insights on ensuring AI systems align with data protection principles. However, a comprehensive legal definition of AI is still missing from UK legislation. In terms of data protection, the Data Protection Act 2018 (DPA) and the UK General Data Protection Regulation (UK GDPR) outline the rules for handling personal data within AI systems. These regulations are vital in managing AI-related data breaches and place significant duties on data controllers and processors to safeguard personal data and ensure its lawful use.

Comparative Analysis: AI Regulation in Africa

Several African countries are leading the way in AI regulation, with nations like Kenya and Egypt developing national AI strategies.  For instance, Kenya has emerged as a tech hub, attracting investments from global giants like Google and Microsoft. The Kenyan government has focused on AI over the past six years, implementing policies that promote innovation while ensuring ethical standards.

In Ghana, the government has initiated the Ghana National Artificial Intelligence Policy 2023, which aims to harness AI for economic growth while addressing ethical concerns. The policy emphasizes the importance of data protection and the need for a regulatory framework that fosters innovation while safeguarding citizens’ rights.

In contrast, Tanzania’s regulatory framework remains fragmented, lacking a unified approach to AI governance but there is hope as seen above and with the now in Operation the Personal Data Protection Commission as authorized by the Personal Data Protection Act 2022.

The African Union (AU) is also working on a continental AI policy, which is expected to guide member states, including Tanzania, in creating their own national strategies.

Recommended Principles for AI Regulation in Tanzania

To develop an effective AI regulatory framework, Tanzania should consider the following principles:

Transparency: Ensure that AI systems are understandable and their decision-making processes are clear to users.

Accountability: Establish clear responsibilities for AI outcomes, particularly in public service applications.

Ethical Considerations: Promote ethical AI development that respects human rights and minimizes bias.

Risk Minimization: Implement measures to identify and mitigate risks associated with AI technologies.

Challenges in AI Regulation

Despite the ambitious plans, Tanzania faces several challenges in its digital transformation journey:

Lack of Awareness: There is often a lack of understanding of AI among policymakers and the public, hindering the development of well-informed regulations.

Limited Resources: Government agencies may lack the necessary resources and capacity to ensure adequate oversight of AI technologies.

Fragmented Regulation: The rapid evolution of AI technologies can lead to inconsistent regulations across different sectors, creating confusion for developers and users.

Legal Cases Involving AI Misuse

Two notable court cases illustrate the potential consequences of AI misuse:

1. Case of Chatbot Misrepresentation: Moffatt v. Air Canada, 2024 BCCRT 149,: A Misrepresentation by an AI Chatbot- Air Canada sought to distance itself from the chatbot’s error, arguing that the AI operated independently as a distinct legal entity. Jake Moffatt sought a refund from Air Canada after receiving incorrect information from the airline’s chatbot regarding bereavement fares. The chatbot told him that retroactive applications for these fares were possible, a claim that was later contradicted by other information on the airline’s website. Moffatt requested compensation for the difference between regular and bereavement fares. To prove negligent misrepresentation, he needed to show that Air Canada had a duty of care, made a false or misleading statement, did so negligently, and that he reasonably relied on the information, resulting in damages. Air Canada denied responsibility for the chatbot’s errors and argued that Moffatt did not follow the correct procedure for bereavement fares. The airline further claimed that the chatbot, while part of their website, should be treated as a separate entity, absolving them of liability. The tribunal ruled that Air Canada did owe Moffatt a duty of care due to their consumer-service provider relationship. It found that the chatbot gave inaccurate information and that Air Canada failed to ensure its accuracy, thereby breaching its duty and holding the airline accountable for the chatbot’s actions, highlighting the importance of responsibility for AI systems. The ruling that the company was liable for the chatbot’s actions, emphasizing the need for accountability in AI systems.

2. Data Privacy Violation: Clearview AI, a company specializing in facial recognition technology, faced backlash in 2022 when it was disclosed that the firm had harvested billions of images from social media sites without user consent. These images were then used by law enforcement agencies to match individuals against publicly available data in an effort to identify suspects, witnesses, and victims. This raised serious concerns about privacy, consent, and data protection, particularly under European laws like GDPR. In response, the UK’s Information Commissioner’s Office (ICO) and other European regulators-initiated investigations into Clearview AI for potentially breaching data protection regulations by collecting data without proper consent. This situation highlights the difficulty of regulating AI firms operating internationally that manage vast amounts of personal data without user approval.

While the British Airways data breach was not directly tied to AI, it underscores the risks associated with large-scale data processing and the necessity for robust cybersecurity. In 2018, hackers exploited weaknesses in the airline’s online booking system, compromising the personal and financial details of about 400,000 customers. The ICO fined British Airways £20 million for failing to secure this data. In the context of AI, similar vulnerabilities could arise due to inadequate encryption or access control, raising concerns about accountability when sensitive data is processed by AI systems.

Companies are mandated to implement stricter data protection measures, highlighting the importance of transparency and user rights in AI deployment.

Conclusion

As Tanzania continues to develop its AI regulatory framework, it is crucial to create policies that protect citizens from potential misuse of AI while harnessing its benefits for economic growth and social development. By learning from the EU’s AI Act and the experiences of other African nations, Tanzania can establish a robust regulatory environment that fosters innovation and addresses ethical and societal concerns.

The ongoing dialogue among stakeholders, including government officials, industry leaders, and researchers, will be vital in shaping a regulatory framework that supports responsible AI development. The time for action is now; Tanzania must seize the opportunity to lead in AI regulation, ensuring that the power of technology is harnessed for the benefit of all citizens.

The Author Mr. Sunday Ndamugoba Esq, (LLB(TZ),LLM (UK)) is a Partner and corporate lawyer at Rive & Co, as well as an Arbitrator and Mediator. He is an advocate practicing in Tanzania and Zanzibar with over ten years of experience in assisting fintechs, startups, tech companies, and clients with data protection and cybersecurity-related matters.

Bibliography:

  1. The EU AI Act: Implications for Africa:    This article discusses the implications of the EU AI Act for African nations, highlighting how it can serve as a blueprint for developing AI regulations. [Read more here](https://blog.masterdata.co.za/2024/12/03/the-eu-ai-act-implications-for-africa/)
  • AI Policy Development in Africa: This piece explores how various African nations are creating policies to govern AI, including the ratification of the Malabo Convention, which aligns with the EU’s GDPR and AI Act. [Read more here](https://hir.harvard.edu/ai-african-policy/)
  • Data Breaches: To read more : https://thebarristergroup.co.uk/blog/ai-data-breaches-and-liability-whos-responsible

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